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From the Wires
Cinedigm Digital Cinema Corp. Announces Fiscal Year End 2009 and Fiscal 2009 Fourth Quarter Results
Fiscal Year 2009 Revenue Growth, Operating Income and Adjusted EBITDA Margin Improvements Continue, Record $39.4 Million Adjusted EBITDA for Fiscal Year 2009 and Strong Operating Cash Flow of $8.4 Million in Fiscal Fourth Quarter 2009, Fourth Quarter Driv
By: Marketwire .
Jun. 11, 2009 08:30 AM
MORRISTOWN, NJ -- (Marketwire) -- 06/11/09 -- Access Integrated Technologies, now doing business as Cinedigm Digital Cinema Corp. ("Cinedigm" or the "Company") (NASDAQ: CIDM), reported a 3% increase in fiscal year 2009 revenue to $83.0 million, and an 18% decrease in revenue, to $17.9 million for the fiscal 2009 fourth quarter ended March 31, 2009, versus the year-ago periods. The Company posted Adjusted EBITDA(1) (defined below) of $39.4 million for the fiscal year 2009, an improvement from fiscal year 2008 Adjusted EBITDA of $30.3 million. The net loss for the fiscal year 2009 of $37.4 million includes non-cash expenses for depreciation, amortization of intangible assets, non-cash interest, stock-based expenses, stock-based compensation, impairment of goodwill and change in the fair value of interest rate swap aggregating $53.6 million or $1.95 per share compared to $44.4 million or $1.74 per share in the fiscal 2008 year-end. The Company generated positive cash flow from operations of $8.4 million in the fiscal 2009 fourth quarter and ended the fiscal year with over $26 million of cash on its balance sheet. FISCAL YEAR 2009 AND FOURTH QUARTER HIGHLIGHTS
-- Fiscal year 2009 revenue increased by 3% to $83.0 million compared to
$81.0 million in the prior year. The yearly improvement was driven largely
by an increase in the media services segment, including increased Virtual
Print Fees ("VPFs") as a result of a larger number of digital screens
deployed and higher media delivery fees in our Digital Media Services
("DMS") delivery unit, offset by a decrease in our content and
entertainment segment due primarily to the movement of several events to
fiscal year 2010 and planned reductions in unprofitable pre-show
advertising contracts.
-- Total fiscal year 2009 Media Services segment revenues of $59.0
million and EBITDA of $46.8 million, versus prior year amounts of $53.9
million and $38.8 million, respectively (before corporate allocation).
-- Total fiscal year 2009 Content and Entertainment segment revenue of
$22.7 million and EBITDA loss of $0.5 million, versus prior year amounts of
$25.8 million and loss of $1.2 million, respectively (before corporate
allocation).
-- Fiscal 2009 fourth quarter revenue decreased by 18%, to $17.9 million
from $21.9 million in the comparable year-ago period primarily due to a
contracted 16% step-down in VPF rates and seasonally fewer titles and
prints in the quarter. This contracted step-down in VPF rates charged to
the major studios will stabilize with just one more contracted reduction of
7% in the third quarter of fiscal 2012.
-- Fiscal year 2009 Loss From Operations improved to $4.9 million from a
loss of $5.9 million in the prior year, due to increased revenues and
reduced direct operating expenses and SG&A, offset by an impairment charge
and increased depreciation. Loss From Operations for the fiscal 2009 fourth
quarter decreased to $2.0 million, from a loss of $2.4 million in the
comparable year-ago period, due to reduced operating expenses, offset by
decreased revenues.
-- $5 million of annualized expense savings driven by a reduction in
headcount and operating costs, with $2 million of the savings recognized in
fiscal Year 2009
-- Adjusted EBITDA margins improved to 47% for fiscal Year 2009 from 37%
in the prior year. Adjusted EBITDA margins remained at 41% in the fiscal
2009 fourth quarter, the same margin as in the comparable year-ago period.
Bud Mayo, Chief Executive Officer of Cinedigm, stated, "The past year has been tremendously exciting for Cinedigm. Not only did we rebrand the company, but we also brought ground-breaking events to consumers and fans of college football and the NBA in the fourth quarter. Despite continuing economic challenges, I am confident that Cinedigm is in a strong position to capitalize on trends we are seeing in the resilient theatre industry, including the increasing demand for 3-D content. We look forward to continuing to play a leadership role in the transition of the exhibition industry to digital cinema and will leverage our leadership position to drive the growth in our system deployment, digital delivery, software and content and entertainment segments. We will also continue to work diligently to sustain our disciplined expense controls and will continue to find innovative ways to leverage our industry leading digital cinema platform in an effort to increase revenues organically with minimal use of capital." PHASE 2 UPDATE Mayo added, "We are optimistic about our intensifying efforts to secure financing for Phase 2 installations through third party lenders as well as our exhibitor and vendor partners which will generate ongoing fees and other key revenue streams for Cinedigm. To date we have installed 139 Phase 2 screens and approximately 3,900 screens in total." FISCAL YEAR 2010 FINANCIAL GUIDANCE All comments regarding fiscal year 2010 do not assume a large Phase 2 deployment or a large rollout by other entities, including DCIP, although the Company expects both to occur. Nevertheless, Cinedigm expects to produce double digit increases in revenues and EBITDA over fiscal year 2009 levels as a result of the full year impact of $5 million of expense savings, the overall increase in industry digital screen deployments, which will lead to growth in our DMS division's revenues, an increase in contracted content events for Fiscal year 2010 as well as continued solid performance of its Phase 1 deployments. CONFERENCE CALL NOTIFICATION Cinedigm will host a conference call to discuss its financial results at 10:30 a.m. EDT on Thursday, June 11, 2009. The conference can be accessed by dialing 719.325.4826 at least five minutes before the start of the call. No passcode is required. The conference call will also be webcast simultaneously and will be accessible via the web on Cinedigm's Web site, www.cinedigmcorp.com. A replay of the call will be available after 1:30 p.m. Eastern at 719.457.0820 or 888.203.1112, passcode 5649731. The replay will be accessible through Thursday, June 18th. About Cinedigm Cinedigm Digital Cinema Corp. is the global leader in fulfilling the promise of digital cinema. Its ground-breaking technology platform helps exhibitors, distributors, studios and content providers transform the consumer movie experience -- by expanding theatrical features to include not only movies but also live 2-D and 3-D performances such as major sporting events, concerts and gaming. The Company also enables theatres to create exhibitions and advertising opportunities targeted to specific audience groups and locations thereby offering new revenue opportunities for these venues. Cinedigm's leading digital cinema platform and one-of-a-kind satellite delivery operations support almost 4,000 theatre screens equipped with DLP Cinema® projection systems across the United States with over thirteen million digital showings of Hollywood features to date. www.Cinedigm.com [CIDM-E] Safe Harbor Statement Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cinedigm officials during presentations about Cinedigm, along with Cinedigm's filings with the Securities and Exchange Commission, including Cinedigm's registration statements, quarterly reports on Form 10-QSB and annual report on Form 10-KSB, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "could," "might," "believes," "seeks," "estimates" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cinedigm's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about Cinedigm, its technology, economic and market factors and the industries in which Cinedigm does business, among other things. These statements are not guarantees of future performance and Cinedigm undertakes no specific obligation or intention to update these statements after the date of this release. (1) Adjusted EBITDA is defined by the Company to be earnings before interest, taxes, depreciation and amortization, other income (expense), net, stock-based compensation and non-recurring items. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation in the tables attached to this release of Adjusted EBITDA to U.S. GAAP net income (loss). The Company calculated and communicated Adjusted EBITDA in the tables because the Company's management believes it is of importance to investors and lenders by providing additional information with respect to the performance of its fundamental business activities. The Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the U.S. GAAP operating measure of net income (loss). In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. Management does not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. These non-GAAP measures should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.
ACCESS INTEGRATED TECHNOLOGIES, INC.
d/b/a CINEDIGM DIGITAL CINEMA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2008 2009
----------- -----------
Revenues $ 21,892 $ 17,885
Costs and expenses:
Direct operating (exclusive of depreciation and
amortization shown below) 6,771 6,074
Selling, general and administrative 6,043 4,359
Provision for doubtful accounts 705 316
Research and development (341) (19)
Stock-based compensation 92 292
Impairment of intangible asset 1,588 -
Depreciation of property and equipment 8,335 8,137
Amortization of intangible assets 1,080 765
----------- -----------
Total operating expenses 24,273 19,924
----------- -----------
Loss from operations (2,381) (2,039)
Interest income 232 61
Interest expense (8,797) (6,419)
Other income (expense), net (289) (266)
Change in fair value of interest rate swap - (683)
----------- -----------
Net loss (11,235) (9,346)
Preferred stock dividends - (50)
----------- -----------
Net loss attributable to shareholders $ (11,235)$ (9,396)
=========== ===========
Net loss per Class A and B common share - basic
and diluted $ (0.43)$ (0.34)
=========== ===========
Weighted average number of Class A and B common
shares outstanding:
Basic and diluted 26,277,411 27,941,161
=========== ===========
Access Integrated Technologies, Inc.
d/b/a Cinedigm Digital Cinema Corp.
Adjusted EBITDA (as defined)
Reconciliation to GAAP Net Income
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2008 2009
----------- -----------
Net loss $ (11,235) $ (9,346)
Add Back:
Amortization of software development 210 76
Depreciation of property and equipment 8,335 8,137
Amortization of intangible assets 1,080 765
Interest income (232) (61)
Interest expense 8,797 6,419
Other (income) expense, net 289 266
Change in fair value of interest rate swap - 683
Impairment of intangible asset 1,588 -
Stock-based expenses - 37
Stock-based compensation 92 292
----------- -----------
Adjusted EBITDA (as defined) $ 8,924 $ 7,268
=========== ===========
ACCESS INTEGRATED TECHNOLOGIES, INC.
d/b/a CINEDIGM DIGITAL CINEMA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
Twelve Months Ended
March 31,
-----------------------
2008 2009
----------- -----------
Revenues $ 80,984 $ 83,014
Costs and expenses:
Direct operating (exclusive of depreciation and
amortization shown below) 26,569 25,671
Selling, general and administrative 23,170 18,070
Provision for doubtful accounts 1,396 587
Research and development 162 188
Stock-based compensation 453 945
Impairment of intangible asset 1,588 -
Impairment of goodwill - 6,525
Depreciation of property and equipment 29,285 32,531
Amortization of intangible assets 4,290 3,434
----------- -----------
Total operating expenses 86,913 87,951
----------- -----------
Loss from operations (5,929) (4,937)
Interest income 1,406 372
Interest expense (29,327) (27,520)
Debt refinancing expense (1,122) -
Other income (expense), net (715) (754)
Change in fair value of interest rate swap - (4,529)
----------- -----------
Net loss (35,687) (37,368)
Preferred stock dividends - (50)
----------- -----------
Net loss attributable to shareholders $ (35,687) $ (37,418)
=========== ===========
Net loss per Class A and B common share - basic
and diluted $ (1.40) $ (1.36)
=========== ===========
Weighted average number of Class A and B common
shares outstanding:
Basic and diluted 25,576,787 27,476,420
=========== ===========
Access Integrated Technologies, Inc.
d/b/a Cinedigm Digital Cinema Corp.
Adjusted EBITDA (as defined)
Reconciliation to GAAP Net Income
(In thousands)
(Unaudited)
Twelve Months Ended
March 31,
-----------------------
2008 2009
----------- -----------
Net loss $ (35,687) $ (37,368)
Add Back:
Amortization of software development 658 677
Depreciation of property and equipment 29,285 32,531
Amortization of intangible assets 4,290 3,434
Interest income (1,406) (372)
Interest expense 29,327 27,520
Other (income) expense, net 715 754
Change in fair value of interest rate swap - 4,529
Debt refinancing expense 1,122 -
Impairment of intangible asset and goodwill 1,588 6,525
Stock-based expenses - 193
Stock-based compensation 453 945
----------- -----------
Adjusted EBITDA (as defined) $ 30,345 $ 39,368
=========== ===========
ACCESS INTEGRATED TECHNOLOGIES, INC.
d/b/a CINEDIGM DIGITAL CINEMA CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
(Unaudited)
March 31, March 31,
2008 2009
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 29,655 $ 26,329
Accounts receivable, net 21,494 13,884
Unbilled revenue, current portion 6,393 3,082
Deferred costs 3,859 3,936
Prepaid and other current assets 1,316 1,798
Notes receivable, current portion 158 616
---------- ----------
Total current assets 62,875 49,645
Property and equipment, net 269,031 243,124
Intangible assets, net 13,592 10,707
Capitalized software costs, net 2,777 3,653
Goodwill 14,549 8,024
Accounts receivable, net of current portion 299 386
Deferred costs 6,595 3,967
Notes receivable, net of current portion 1,220 959
Unbilled revenue, net of current portion 2,075 1,253
Security deposits 408 424
Restricted cash 255 255
---------- ----------
Total assets $ 373,676 $ 322,397
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 25,213 $ 14,954
Current portion of notes payable 16,998 25,248
Current portion of deferred revenue 6,204 5,535
Current portion of customer security deposits 333 314
Current portion of capital leases 89 175
---------- ----------
Total current liabilities 48,837 46,226
Notes payable, net of current portion 250,689 225,957
Capital leases, net of current portion 5,814 5,832
Deferred revenue, net of current portion 283 1,057
Customer security deposits, net of current portion 46 9
Fair value of interest rate swap - 4,529
---------- ----------
Total liabilities 305,669 283,610
---------- ----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value per share;
15,000,000 shares authorized; issued and
outstanding:
Series A 10%-20 shares authorized; 0
and 8 shares issued and outstanding, at
March 31, 2008 and March 31, 2009,
respectively. Liquidation preference $4,050 - 3,476
Class A common stock, $0.001 par value per share;
40,000,000 and 65,000,000 shares authorized at
March 31, 2008 and March 31, 2009, respectively;
26,143,612 and 27,544,315 issued and 26,092,172
and 27,492,875 shares outstanding at March 31,
2008 and March 31, 2009, respectively 26 27
Class B common stock, $0.001 par value per share;
15,000,000 shares authorized; 733,811 shares
issued and outstanding at March 31, 2008 and
March 31, 2009, respectively 1 1
Additional paid-in capital 168,844 173,565
Treasury Stock, at cost; 51,440 Class A shares (172) (172)
Accumulated deficit (100,692) (138,110)
---------- ----------
Total stockholders' equity 68,007 38,787
---------- ----------
Total liabilities and stockholders' equity $ 373,676 $ 322,397
========== ==========
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